Relates to anti-rebating provisions for insurers

BILL NUMBER:S6812A

Title of bill

An act to amend the insurance law, in relation to anti-rebating provisions for insurers

Purpose

The purpose of this bill is to permit property and casualty companies, agents, and brokers to provide merchandise or other considerations with a value not to exceed twenty five dollars during the insurance sales process to an applicant for insurance. This bill also removes a restriction that the merchandise be promotional in nature.

Summary of provisions

This bill amends subsection (a) of section 2324 of the insurance law as amended by chapter 482 of the laws of 2000, and amends section 2324 of the insurance law by adding a new subsection (g). This bill also amends subsection (c) of section 4224 of the insurance law as amended by chapter 592 of the laws of 2008.

Justification

Sections 2324 and 4424 of the insurance law restrict insurers and agents from providing anything of value to applicants for insurance, beyond that which is provided for in the insurance contract. These sections, referred to as the anti-rebating statutes, were established to keep insurers and agents from offering valuable items not related to the insurance contract as incentives for an applicant to purchase a policy. Many years ago, the legislature recognized the need for an exception to this section for items of minimal value that insurers or agents might choose to offer to potential customers during the sales process and amended the law to provide for an exception for items with a value of fifteen dollars or less. This bill would update that amount once again to reflect the cost of inflation since 2000 and extend the exception to include the life insurance sales process.

Legislative history

This is a new bill.

Fiscal implications

None to State.

Effective date

This act shall take effect immediately.